The Boon, The Bane, and The Busy: An Overview of the “No Placement Fee” Policy

Placement Fee

According to Asianjournal’s ‘2017 Philippine Recruitment Outlook’, the recruitment industry will be experiencing a stable growth of 4% in the next five years. For that matter, new and old agencies are expected to take part in the game. As competition intensifies, there will surely be more overseas professional opportunities available for Filipinos. The challenge for trusting job seekers is to properly identify a reliable recruitment firm providing the right recruitment service, to help them find that perfect job for their great pursuit of a better life.

Employment

The Philippine Overseas Employment Administration (POEA) allows licensed recruitment agencies to collect placement fees from their candidates as payment for successfully securing them a position abroad. As per Workabroad.ph’s compiled data on recruitment fees, placements are commonly calculated to be at 1 months’ worth of the candidate’s salary. Some Manila recruitment agencies use a 50-50 payment system to lessen the burden on both the candidate and principal. While this method may seem to be the most cost-effective approach for everyone, there are still some unseen factors that need to be considered.

World-PSI states that placement fees, regardless of the job grade, can deteriorate the quality of a worker’s disposition before he even starts working for the employer. Due to the pressure brought by raising the needed amount to get the job, as well as straightaway providing for his family back home, he is immediately impacted mentally and emotionally. Another good example of an adverse effect of placement fees is the “debt trap”. From an article written by Ana P. Santos and Sofia Tomacruz of Rappler, debt trap is the usual situation OFW’s get into when they deal with placement fees. Poor Filipinos wanting to get a shot at working abroad will go to a bank or a lending company to get a loan. When their initial earnings are not enough to pay their debts on time, high-interest payments are factored in; it becomes difficult or impossible for them to repay what they borrowed. This results in the loss of employee morale leading to a subpar service for the employer; after which they’d come to a realization that they have a growing mountain of debt that even their job abroad won’t be able to compensate for. Thus, having to prematurely leave their employer.

Although taking placement fees is a common practice in the industry, there are a few that implements the reverse. Selected recruitment firms administer a more humanitarian approach in conducting their business processes by employing a “no placement fee” policy resulting in a more positive impact not only for candidates but also for the employer. A no placement fee agency forwards the would-be expenditures of the candidate to the hiring company. Although this seems to be less attractive to employers as they will shoulder all fees, it is, in fact, the opposite. If Filipino candidates can pursue their careers without paying any fees and they will not encounter any of the negative points raised above, everyone can ensure the candidate’s longevity with their employer. Retaining talented and loyal employees is an absolute win for any company.

employers

“The International Labor Organization (ILO) has named the Philippines as one of the pilot countries for its global program for promoting migrant workers’ protection, citing the country’s improving policies on ensuring safe and fair recruitment.” – Tomoko Nishimoto, ILO Regional Director for Asia and the Pacific

There have been arguments from the ILO Organization regarding ethical recruitment and the motion to scrap placement fees completely. There are also many indicators that suggest the recruitment industry should shift completely towards this policy. When that happens, it will most definitely reduce, if not completely wipe out recruitment scams in the Philippines and it will impose the goal of ethical recruitment to prioritize helping less fortunate Filipinos get better chances in life.

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Rensol Recruitment and Consulting, a POEA licensed agency, has been advocating a no placement fee policy, since its inception in 1999. Focusing on opportunities that incorporates the same vision and values and upholds ethical recruitment practices beneficial for all parties of People, Partner Agency and Principal.

For more information on how to conduct an above and beyond recruitment campaign in the Philippines, please connect with our Business Development Team at [email protected]. We will be ready to sit down with you and understand your concerns and configure a recruitment plan to ensure better success.

ABOUT THE COMPANY: Rensol Recruitment and Consulting, Inc. is the fastest growing recruitment agency in The Philippines. A career consultant that aims to go above and beyond the level of expectations of both the aspirations of the candidates and the dream team standards of employers through providing exceptional opportunities and unparalleled quality-driven recruitment services.

A business administration graduate from De La Salle College of St. Benilde, Angelo is experienced in business development, market research, logistics and analytics. A self-proclaimed romantic, he started writing as a hobby where it slowly turned into a passion, he allows his emotions to flow through his literary works to capture the heart of his audience and deliver his ideologies through wordplay and creative thinking, his specialty is freewriting and poetry, but he is also venturing to short stories and novels.

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